I'm the publisher of Forbes magazine, where I write a biweekly column called Innovation Rules. I'm also a regular panelist on cable news' popular business show, Forbes on FOX (with an average viewership of 1.2 million households per show in 2012), and frequent guest analyst on CNBC's The Kudlow Report. My 2004 book, Life 2.0, was a Wall Street Journal business bestseller. I'm also an entrepreneur, an active angel investor, and sit on three outside boards. For co-founding Silicon Valley's largest public affairs organization, the 6,500-member Churchill Club, I'm a past Northern California winner of Ernst & Young's prestigious "Entrepreneur of the Year Award." I earned a B.A. from Stanford University. I lecture up to 50 to 60 times a year on the innovation economy.

Energy in 2050: Shell's Peter Voser

Peter Voser, Chief Executive of Royal Dutch Shell speaks during a press conference in London, on March 16, 2010. Global energy giant Royal Dutch Shell revealed Tuesday that it will axe another 1,000 positions by 2011, on top of the 1,000 job losses already earmarked for this year. Chief executive Peter Voser announced the latest round of job cuts as he presented the group's annual strategic update. (Image credit: AFP via @daylife)

This article originally appeared in the Apr. 23, 2012 issue of Forbes magazine.

This year will likely be the first time in history that a company tops $500 billion in sales. Two oil companies are good bets to pass the mark: the U.S.’ ExxonMobil and the U.K.-registered, Netherlands-headquartered Royal Dutch Shell. In late March I talked with Shell’s CEO, Peter Voser, onstage at a Silicon Valley Churchill Club event.

How did an economist become CEO of Shell? I started out at Shell but left to become the CFO of [Swiss-based] ABB. In 2004 there was a crisis at Shell, and I came back in as CFO.

What was the crisis? The company had overstated its oil reserves in the ground. A few heads rolled for that.

Ouch. And then you became CEO in 2009. Yes—it was a shock to the company! I was the first non-Dutch or non-Brit [Voser is Swiss] to head the company. The second shock was having an economist, not a technologist, at the top. So that gave me a few challenges in the beginning. I had actually said no to the job a few times.

What convinced you to accept the CEO job? The Shell board kept up an ongoing conversation with me. Shell had turned 100 years old in 2007, so we talked a lot about how to make Shell a world leader for the next 100 years. By 2050 the world will have 9 billion, not 7 billion, people; global energy consumption will be at least double what it is now; and China will have 600 million or more cars. The question is how should Shell evolve to serve this new world?

You became CEO in June 2009, during a global economic crisis. What was that like? I saw it as a great opportunity. Shell had become too slow. We’d built up a lot of structures, hierarchies, fat. I wanted to change that from the first day I became CEO.

Speed of transformation is high on every CEO’s list. What are the keys? Two things. First, you have to communicate right from the start—and very clearly—what you want to do. Then, when you start to make changes, you start at the top. We took 20% of Shell’s top management out in order to make the company fitter, with faster decision trees, more accountability ­further down. Then I took the unusual step of asking the top 14,000 people at Shell to reapply for their jobs.

How long did it take to change Shell’s organizational structure? Seven months. I wanted it in six, but I was happy with seven. When you decide to change, you have to move fast.

Where is the world’s energy going to come from? Let’s start with the facts. We estimate that energy demand worldwide will double by 2050. Ninety percent of the new demand will come from non-OECD countries—and half of that from China. The numbers I’ve given you assume gains in ­energy efficiency. If we don’t have those gains, then energy demand will triple by 2050. Remember that energy demand rises fastest in countries that are coming out of poverty, with people buying their first cars and refrigerators. We must assume that the next 20 to 25 years will be a very intensive energy phase.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.